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BHP Reports Mixed Production Update - Analyst Blog

On Jan 23, 2013,
BHP Billiton Limited
(
BHP
), a natural resources company, reported improved half-year
production data for most of its business segments.

BHP saw a year-over-year increase in production across most of
its products including petroleum, alumina, copper, iron,
manganese ore and energy coal in the December 2012 half. However,
production of some products like aluminium, nickel, lead, silver,
and manganese alloy declined year over during the period.

Among all products, majority of the decline was seen in
diamonds, which went down 35% against the previous half year. As
a reminder, last quarter BHP agreed to sell its stake in the
EKATI Diamond Mine and Diamonds Marketing operations for US$500
million in cash. The sale, subject to regulatory approvals, is
expected to be completed by the first half of 2013.

BHP expects production of iron ore and petroleum to increase
in the next half ending in June 2013. The company is hopeful that
production from its major iron ore facility, Western Australian
Iron Ore (WAIO), would increase by as much as 5% in the financial
year 2013. Also, a production of 240 million barrels of petroleum
is expected for financial year 2013.

Recently, in mid-Jan, another mining giant
Rio Tinto Plc.
(
RIO
) also reported its production update for the quarter ended Dec
31, 2012. The company posted an increase in almost all of its
products for the quarter.

BHP is expected to release its half year earnings results on
Feb 20, 2013. The Zacks Consensus Estimate stands at $1.12 for
the half year 2013. The company has roughly 20 projects in
various development stages, which are likely to contribute
significantly to the profitability in the upcoming quarters.

The stock currently holds a Zacks Rank #3 (Hold). Other stocks
worth a look in the industry are
Denison Mines Corp.
(
DNN
) and
New Gold Inc.
(
NGD
); both holding a Zacks Rank #2 (Buy).

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